GREEN BAY, Wis., and CHICAGO, Jan. 9 /PRNewswire-FirstCall/ — WPS Resources Corporation (NYSE:WPS) (“WPS Resources”) and Peoples Energy Corporation (NYSE:PGL) (“Peoples”) announced that they have made significant progress toward obtaining the approvals needed to close their proposed merger, including:
— On January 9, 2007, WPS Resources and Peoples reached agreement with
most of the interveners on the contested issues in the merger
application pending before the Illinois Commerce Commission. The
agreement is between the companies and the City of Chicago, the Cook
County State’s Attorney’s Office, the Attorney General of the State of
Illinois, the Citizens Utility Board, the Environmental Law and Policy
Center, the Utility Workers Union of America, AFL-CIO, and UWUA Local
Union No. 18007 (UWUA Local 18007). The Staff of the Illinois Commerce
Commission, which as a general rule does not join in settlement
agreements, has signed the agreement to indicate that Staff has no
objection to and will not oppose the terms of the agreement. The
agreement is memorialized in documents filed today with the Illinois
Commerce Commission. Discussions continue with the remaining
intervening parties. All agreements must be presented to and are
subject to approval by the Illinois Commerce Commission.
— On December 21, 2006, the Federal Energy Regulatory Commission approved
the merger transaction.
— On December 6, 2006, the shareholders of WPS Resources and Peoples
voted overwhelmingly to approve the completion of the merger.
“We are pleased that our efforts to complete this merger have been well received by the Federal Energy Regulatory Commission, shareholders, and the communities in which we operate,” stated Larry L. Weyers, Chairman, President and CEO of WPS Resources. Weyers will become President and CEO of Integrys Energy Group, Inc., the new name for the combined companies when the merger is completed. “We are grateful to the parties for their cooperation in this agreement. We will continue to work on resolving issues in Illinois and Wisconsin. We continue to be hopeful of obtaining all the necessary regulatory approvals to close the merger during the first quarter of 2007.”
A summary of major components of the Illinois agreement are as follows:
— Inclusion of Synergy Savings and Costs to Achieve in Customer Rates
In the rate cases to be filed by Peoples Gas and North Shore Gas in
2007, the companies will use historical test years ended September 30,
2006, with adjustments for “known and measurable changes” through
September 30, 2007. There will be adjustments for “known and
measurable changes” for merger related annual synergy savings totaling
about $13 million.
Peoples Gas’ and North Shore Gas’ recovery of merger-related costs
incurred to achieve the synergy savings will be capped at about
$45 million. The estimate of such costs provided in testimony filed
previously with the Illinois Commerce Commission was about $47 million.
Of this amount, about $35 million will be recovered through an annual
cost recovery of about $7 million which will be provided through a
five-year amortization period included in the 2007 rate case. The
remaining costs, to the extent actually incurred, will be eligible for
recovery through rates established in a future rate case.
— Service-Related Proposals
Peoples Gas and North Shore Gas will conduct certain operational
studies proposed by Illinois Commerce Commission Staff to assist in
improving customer service.
— Energy Efficiency Programs and Funding
In their next rate cases, Peoples Gas and North Shore Gas will propose
energy efficiency programs with an aggregate cost of $7.5 million per
year. It is anticipated the companies will not be obligated to fund
these programs beyond the amount for which the Illinois Commerce
Commission provides cost recovery in the rate case orders.
— Utility Workers Union of America, AFL-CIO, and UWUA Local No. 18007
Peoples Gas commits there will be no reorganization-related layoffs or
reorganization-related position reductions among the UWUA Local 18007
employees. In addition, there will be a specific limited number of
position upgrades and additions to the current union work force levels.
About WPS Resources Corporation
WPS Resources (NYSE:WPS) , based in Green Bay, Wisconsin, is a holding company with five major subsidiaries providing electric and natural gas energy and related services in both regulated and non-regulated energy markets. Its largest subsidiary is Wisconsin Public Service Corporation, a regulated electric and natural gas utility serving northeastern Wisconsin and a portion of Michigan’s Upper Peninsula. Wisconsin Public Service serves more than 425,000 electric customers and 308,000 natural gas customers. Minnesota Energy Resources Corporation is a regulated natural gas utility serving more than 200,000 customers throughout Minnesota. Michigan Gas Utilities Corporation is a regulated natural gas utility serving 161,000 customers in lower Michigan. Another subsidiary, Upper Peninsula Power Company, is a regulated electric utility that serves approximately 52,000 electric customers in Michigan’s Upper Peninsula.
WPS Resources’ major non-regulated subsidiary consists of WPS Energy Services, Inc., a diversified non-regulated energy supply and services company serving commercial, industrial and wholesale customers and aggregated groups of residential customers. Its principal market is the northeast quadrant of the United States and adjacent portions of Canada. Its principal operations are in Illinois, Maine, Michigan, Ohio, Texas, Virginia, and Wisconsin in the United States and Alberta, Ontario, and Quebec in Canada. WPS Energy Services also owns and/or operates non-regulated electric generation facilities in Wisconsin, Maine, Pennsylvania, New York, and New Brunswick, Canada; steam production facilities in Arkansas and Oregon; and a partial interest in a synthetic fuel processing facility in Kentucky.
Visit the WPS Resources Web site at http://www.wpsr.com/ for additional information.
About Peoples Energy
Peoples Energy, (NYSE:PGL) a member of the S&P 500, is a diversified energy company consisting of three primary business segments: Gas Distribution, Oil and Gas Production, and Energy Marketing. Peoples Gas and North Shore Gas, regulated utilities, deliver natural gas to about one million customers in the City of Chicago and 54 communities in northeastern Illinois. The company’s non-utility businesses include Peoples Energy Services (PESC) and Peoples Energy Production (PEP). PESC, launched in 1996, serves more than 40,000 customers, providing a portfolio of products to manage the energy needs of business, institutional and residential consumers. PEP is primarily engaged in the acquisition and development of proven onshore natural gas reserves with upside potential in a limited number of strategic supply basins. Value is then added through drilling programs, production enhancements and reservoir optimization.
Visit Peoples’ website at http://www.peoplesenergy.com/ for more information.
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. You can identify these statements by the fact that they do not relate strictly to historical or current facts and often include words such as “anticipate,” “expect,” “intend,” “may,” “could,” “project,” “believe” and other similar words. Forward-looking statements are beyond the ability of WPS Resources and Peoples Energy to control and, in many cases, neither WPS Resources nor Peoples Energy can predict what factors would cause actual results to differ materially from those indicated by forward-looking statements. Please see WPS Resources’ and Peoples Energy’s periodic reports filed with the Securities and Exchange Commission (including their 10-Ks and 10-Qs) for listings of certain factors that could cause actual results to differ materially from those contained in forward-looking statements. All forward-looking statements included in this press release are based upon information presently available, and neither WPS Resources nor Peoples Energy assume any obligation to update any forward-looking statements.